Commercial Credit Group is preparing to sponsor a securitization, CCG Receivables Trust 2025-2, that will sell $531 million in bonds to investors from a pool of commercial equipment loans primarily.
Construction, transportation, machine tool and waste equipment serve as collateral for the leases in the deal's asset pool, according to Moody's Ratings. Commercial Credit and Keystone Equipment Finance originated the contracts and will service them, Moody's said.
CCG 2025-2 will sell notes to investors through five tranches of class A, B, C and D notes, Moody's said. The class A1 notes mature in October 2026, while the notes through the rest of the capital structure mature in August 2034.
Moody's, Fitch Ratings and S&P Global Ratings all assessed the notes. To the most senior tranche, Moody's assigned P1; Fitch assigned F1+, and S&P assigned A1+. The A2 class, which holds the bulk of the note balance, $335.9 million, received Aaa from Moody's; AAA from Fitch and AAA from S&P.
Moody's details several strengths in the transaction, including a robust underwriting process and a short, weighted average (WA) original term of 52 months. Only 22.8% of contracts, by the original pool balance, have original terms of 61 months. Also, historical vintage net losses are very low compared with obligor defaults, because of strong recovery rates.
Notes also benefit from several forms of credit enhancement, including a sequential pay structure, Moody's said. That, combined with a non-declining reserve account of 1.00% of the initial pool balance, will allow credit enhancement to accumulate in the deal.
Overcollateralization representing 3.25% of the note balance also provides credit enhancement to the notes and is part of a structure that includes a fully funded,.
Almost all the underlying contracts in the collateral pool, 98.7%, are loans, and tractors account for the largest proportion of the equipment type, 22.8%, Moody's said.
